THE?STATE OF the economy and name recognition of local economic pundits were major talking points this past week.
The week started with Prime Minister Freundel Stuart having “a go” at his critics, whom he called “a lot of pundits around here”. His assertion that none of them had their names called to replace Dominique Strauss Khan, the former International Monetary Fund (IMF) head, because “they have no name recognition outside of small villages in Barbados” was true.
But it was the kind of red herring that suggested to me that either Lady Gaga or Justin Bieber could be the next IMF chief if name recognition is part of the criteria.
Ironically, during the latter part of the week, local Professor Frank Alleyne threw an economic doosra into the debate by speaking on the local economy with the kind of authority that not even Mr Strauss Khan could match.
Alleyne, the chairman of the Council of Economic Advisers, made the important point that the problems being faced now were similar to those faced by former Prime Minister Erskine Sandiford (now Sir Lloyd) in 1991-1992 and that we are “back to square one”.
Accepting the professor’s opinion, then how did we get back there?
I am not going to ask the politically-charged question as to how Barbados avoided these problems during the 14 years of the Owen Arthur administration, but if, as internationally renown economist Professor Joseph Stiglitz said, economic policy can make the difference in a recession, then it can also make a difference in good times too!
Small open economies, especially without natural resources, are notoriously difficult to manage and running the American or British economy is a piece of cake compared to the difficult terrain of Third World developing countries like Barbados or Singapore to mention only two.
When the late Right Excellent Errol Barrow was our leader and Minister of Finance, it was openly said he could run America with his eyes shut.
His deft handling of our national affairs with limited financial resources and scarce intellectual firepower merited international attention and made a significant difference to the lives of Barbadians.
Government being a continuum, his 17-year stewardship laid the basic framework upon which successor Prime Ministers Tom Adams and Owen Arthur in their 23 years as Prime Ministers and Ministers of Finance added their own policy imprints and “restructured” the economy within the very limited parameters available to leaders in small open economies.
The record will show that the major economic problems adversely affecting ordinary Barbadians since Independence in 1966 have surfaced during the Sandiford (1987-1994) and Thompson administrations (2008-2010).
Prime Ministers Barrow, Adams and Arthur were able to deal competently with the 1974 oil price increases and the recessions in 1981 and 2001 respectively, without the major social and economic dislocation which we experienced in 1991.
Put another way, during the 50 years from 1961 when Barrow came to power until the present time; the Barrow, Adams and Arthur administrations led this country for 40 years and easily handled the major economic problems.
But how come these major economic problems could catspraddle Mr Sandiford’s administration and now threaten us in the Thompson/Stuart continuum?
Perhaps the non-partisan answer to this question may allow us to understand why we are now back to square one!
What did Messrs Barrow, Adams and Arthur do right in their collective 40-year rule that others did wrong in their ten-year span, or is it just the luck of the draw?
Anyways, even if the Thompson budgetary policy may have started the present problems, the Cabinet all supported the 2008, 2009 and 2010 Budgets.
As it now stands, they are therefore collectively responsible for the economic and budgetary policies since then, which may have aggravated the recession by depressing economic activity and growth and hurting investor confidence!
But the key question is why are we back to square one, and how did we get to square one in the first place?
The choice of policy may be the key, but unless we can accurately answer that question, we will not get off the square!
Ezra Alleyne is an attorney-at-law and former Deputy Speaker of the House of Assembly.
